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Finance

Uniper sells hydropower output through 2027 as part of hedging strategy

Published by Global Banking and Finance Review

Posted on February 25, 2025

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FRANKFURT (Reuters) - German utility Uniper has sold sizeable quantities of its future hydropower output as part of a hedging strategy, the company said on Tuesday.

Uniper has sold 30% of its German hydropower output for 2026 at an average price of 86 euros ($90.09) per megawatt hour (MWh), and 5% of 2027 output at 80 euros/MWh, it showed in a presentation for an analyst call on earnings for 2024.

By comparison, the wholesale benchmark price for round-the-clock German power from all generation sources in 2026 closed at 87.95 euros on Monday, and at 77.75 euros for 2027, LSEG data showed. [EL/DE]

The discrepancies come from differently priced fuel elements in the overall wholesale levels.

Those levels also reflect fossil-generated power and renewable sources that are subject to national support schemes and hard-to-predict weather patterns.

Producers use hedging to reduce the impact of price volatility and to lock in forward production prices when considered favourable.

Wholesale traders use the rates to track price trends and assess a utility's physical asset position.

Uniper has so far sold 80% of its 2025 German output at 121 euros after achieving an average price of 58 euros for sales of its 2024 output.

The company also operates coal, gas-fired and nuclear plants elsewhere in Europe as well as wind and solar power generation units that were not reflected.

Regarding Nordic region prices, Uniper said it sold 40% of nuclear and hydropower for 2026 and 25% of output for 2027 at average prices of 38 euros each, after achieving a same 38 euros for 70% of 2025 output, and 43 euros in 2024.

Sector peer Vattenfall said on February 6 it has sold 52% of Nordic power production for 2025 at an average 48 euros/MWh, 27% of 2026 output at 41 euros and 11% of 2027 also at 41 euros.

($1 = 0.9547 euros)

(Reporting by Vera Eckert; Editing by Christopher Cushing)